That’s a whole ‘bother potential disaster in the making. The US Dollar got where it is based on a large and strong economy, economic leadership and alliances, and complete trustworthiness.
I think you have a bit of a skewed view on that. What you listed is public reasoning, but it isn’t the real strength of the dollar. Its strength is: there isn’t a better choice.
We can certainly screw that up, and we’ve gotten pretty darn close with Congress’s threats of default, but so far, we haven’t.
Now we’re ballooning our debt thinking being a reserve currency absolves us from fiscal responsibility, that we can spend without growing our economy, that our past means we don’t need to invest in our future.
Our economy still is growing though. Besides 2020 for COVID, its been on a steady climb since forever. This is part of that “there isn’t a better choice” part. Lots and lots of other countries haven’t been able to accomplish that.
Meanwhile Chinas economy is still growing faster than any in history, they are second biggest and climbing. Much of the developing world is now in their debt. They could be a contender.
They absolutely could be, but they do some shady backroom currency manipulation. Of all the sins of the US economic system, all the manipulation we do right out front in public in trusted published reports. China can’t claim the same. So while our currency usage isn’t stratospheric growth all the time, there’s a more important factor that investors in sovereign debt look for: predictability. The USA largely has this.
I think you have a bit of a skewed view on that. What you listed is public reasoning, but it isn’t the real strength of the dollar. Its strength is: there isn’t a better choice.
We can certainly screw that up, and we’ve gotten pretty darn close with Congress’s threats of default, but so far, we haven’t.
Our economy still is growing though. Besides 2020 for COVID, its been on a steady climb since forever. This is part of that “there isn’t a better choice” part. Lots and lots of other countries haven’t been able to accomplish that.
They absolutely could be, but they do some shady backroom currency manipulation. Of all the sins of the US economic system, all the manipulation we do right out front in public in trusted published reports. China can’t claim the same. So while our currency usage isn’t stratospheric growth all the time, there’s a more important factor that investors in sovereign debt look for: predictability. The USA largely has this.